FMC Technologies Reports Third Quarter 2008 Diluted Earnings per Share from Continuing Operations of $0.72, up 47 Percent
Houston, Texas, November 06, 2008
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Highlights:
Company revenue up 28 percent
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Energy Production Systems operating profit up 44 percent
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Spin-off of JBT Corporation completed on July 31
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Company reaffirms 2008 guidance for diluted earnings per share of $2.60 to $2.70
HOUSTON, November 6, 2008 – FMC Technologies, Inc. (NYSE:FTI) today reported third quarter 2008 revenue of $1.1 billion for continuing operations, up 28 percent over the third quarter of 2007. Diluted earnings per share from continuing operations were $0.72, up 47 percent from $0.49 per diluted share in the prior-year quarter.
In the quarter, operating profit was up 44 percent in Energy Production Systems and up 12 percent in Energy Processing Systems from the third quarter of 2007.
The spin-off of JBT Corporation was completed on July 31, 2008. An 8-K/A was filed on November 4, 2008 that updated pro forma financials.
"We are very pleased with the growth of revenues and profits in our third quarter results," said Peter D. Kinnear, Chairman, President, and Chief Executive Officer. "We are reaffirming diluted earnings per share guidance for 2008 in a range of $2.60 to $2.70. Our guidance projects growth of approximately 36 percent over the 2007 diluted earnings from continuing operations."
Energy Production Systems
Energy Production Systems’ third quarter revenue of $896.2 million increased 31 percent over the prior-year quarter due mainly to increased subsea systems sales. Revenue for subsea systems was $722 million for the quarter, up 38 percent from the prior-year quarter. Surface wellhead revenue was up 15 percent from the third quarter of 2007.
Energy Production Systems’ operating profit of $101.6 million increased 44 percent over the prior-year quarter. The increase was mainly due to higher volume and operating margin in subsea systems. Operating margin in the segment was 11.3 percent for the quarter.
Energy Production Systems’ inbound orders were $551.3 million for the third quarter. The year-to-date subsea systems inbound orders are now $1.9 billion. Backlog was $3.9 billion and included $3.6 billion in subsea backlog at the end of the third quarter.
Energy Processing Systems
Energy Processing Systems’ third quarter revenue of $229.0 million was 15 percent higher than the prior-year quarter. The revenue increase was driven by the Measurement Solutions and Material Handling Systems businesses.
Energy Processing Systems’ third quarter operating profit of $42.7 million was 12 percent higher than the prior-year quarter. This improvement was led by the Measurement Solutions and Material Handling businesses.
Energy Processing Systems’ inbound orders were $237.2 million for the third quarter and backlog was $375.4 million.
Corporate Items
Corporate expense in the third quarter of 2008 was $9.9 million, a $0.1 million increase from the prior-year quarter.
Other revenue and other income, net, of $4.0 million increased $1.5 million from the prior-year quarter. The net impact of foreign exchange gains or losses in the third quarter was a gain of $4.7 million. The company also had a reduced liability associated with FMC stock held in its non-qualified savings plan of $5.2 million in the quarter.
The company ended the quarter with net debt of $69.0 million. Net interest expense was $0.9 million in the third quarter as compared to a $3.3 million net interest expense in the third quarter of 2007. The lower interest was the result of lower average debt levels in the quarter.
In the quarter, the company repurchased 2.8 million shares of common stock for $154 million. The company has 9.7 million shares remaining in its stock repurchase authorization.
Depreciation and amortization for the third quarter of 2008 was $20.0 million, up from $15.4 million in the prior-year quarter.
Capital expenditures during the third quarter of 2008 totaled $39.5 million, down from $45.5 million in the prior-year quarter as the spending for our previously announced subsea capacity additions nears completion.
The company recorded an income tax rate of 32.8 percent for continuing operations.
Summary and Outlook
FMC Technologies reported diluted earnings per share from continuing operations of $0.72, up 47 percent from the prior-year quarter.
Energy Production Systems’ and Energy Processing Systems’ operating profits were up 44 percent and 12 percent, respectively, over the third quarter of 2007.
The company reaffirmed its estimate for 2008 diluted earnings per share from continuing operations in a range of $2.60 to $2.70. This guidance projects earnings growth of approximately 36 percent over 2007 on a comparable basis.
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FMC Technologies, Inc. (NYSE:FTI) is a leading global provider of technology solutions for the energy industry. The Company designs, manufactures and services technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. Named by FORTUNE Magazine as America's Most Admired Oil and Gas Equipment, Service Company in 2005, 2006 and 2008, FMC Technologies has approximately 10,000 employees and operates 23 manufacturing facilities in 19 countries. For more information visit www.fmctechnologies.com.
This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are information of a non-historical nature and are subject to risks and uncertainties that are beyond the Company's ability to control. These risks and uncertainties are described under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 and may be modified in subsequent quarterly reports filed by the Company with the Securities and Exchange Commission that may be accessed on the Company’s website. The Company cautions shareholders and prospective investors that actual results may differ materially from those indicated by the forward-looking statements.
FMC Technologies, Inc. will conduct its third quarter 2008 conference call at 9:00 a.m. (Eastern Standard Time) on Friday, November 7, 2008. The event will be available at www.fmctechnologies.com. It also will be available for replay after the event at the same website address. In the event of a disruption of service or technical difficulty during the call, information will be posted at www.fmctechnologies.com/earnings.